Roberto Orsi: article of the 8th of October

Roberto Orsi: article of the 8th of October

With high bitterness, I’m going to post the article “The Demise of Italy and the Rise of Chaos,” by Roberto Orsi, published on the 8th of October by LSE, The London School of Economics and Political Science.

It is an extremely and distressingly serious article. However, I agree with Roberto Orsi.

The Italian political and financial leadership – together with the European bureaucracy – is heading Italy to destruction, in a short time, on behalf of a misunderstood “stability,” that means death in the end.

I spent my life supporting Italian companies and entrepreneurs: in Italy, in Europe, in America and Asia. Italy is full of good companies, of serious people and good workers, managers, technicians, craftsmen, artists, teachers. Italy is full of extraordinary common families with high values, able to work hardly all around the world keeping Italy name up.

We were the 5th industrial nation in the world only a few years ago, thanks to our job and values.

And it is not guilt of the “Italians” if an unworthy and incompetent political and financial guidance is dismantling what our fathers and our families created; is destroying our Christian roots too, abandoning the poor people, the sick and weak persons, the old ones, and an entire middle class that is disappearing day by day. Also cancelling the identity of several regions, Sardinia too, stealing the future of the young generations, burning and burying an industrial, scientific and artistic background we were proud of.

One of my friends, a worldwide well-known guru of the light systems, able to defeat the international competition to design and built the light system of Singapore Formula 1 circuit, for example, a splendid example of “Made in Italy,” went bankrupt because the Italian State didn’t pay the debts to his company (by the way, Italian State today re-paid only 7 billion euros of debts among the 140 billion euros circa of debts it has with its Italian suppliers). My friend lost everything, his health included.

I think that it is not the time to stick our heads in the sand and wait for a sort of miracle.

For this reason, I’m posting this terrible Orsi’s shout.

Italy can recover in a very short time, with an incredible turnaround that is in the end our specialty. The only necessary condition is the example – starting from now, from today – of the political and financial leaders, or their immediate removal. Because there is not time to wait for a next generation of leaders, for the promised new Renaissance, and false hopes. Many other countries have huge problems; we are not alone in a difficult panorama. But Italy, the good Italy I mean, which is an asset for humanity, is dying – we have to be conscious of that.

P.s. In any case, I confess I was undecided whether post this article or not. Then, this afternoon I read the unbelievable news that Alitalia, now a private company, given by the State to a group of private investors without debts, saved many times in history and every time in red (why?), will be “saved” using the capital of Poste Italiane, an 100%-owned by the Italian State company, which collects the money of the poor people. So it will be the poor Italian people that will pay the mistakes and the incompetence (just to be polite) of another “Italian Restaurant” = where someone works and others eat.

“The Demise of Italy and the Rise of Chaos”

by Roberto Orsi – LSE, The London School of Economics and Political Science, the 8th of October 2013 –

“Future historians will probably regard Italy as the perfect showcase of a country which has managed to sink from the position of a prosperous, leading industrial nation just two decades ago to a condition of unchallenged economic desertification, total demographic mismanagement, rampant “thirdworldisation”, plummeting cultural production and a complete political-constitutional chaos.

In a previous post on this very blog, the dire situation of Italy’s economy has been briefly sketched. A few months later, the scenario of a serious disruption of the Italian state’s finances is building up, withtax revenues contracting 7% in July, a deficit/GDP ratio projected again well over the 3% mandatory threshold and public debt well over 130% of GDP. It will get worse. The government knows perfectly well that the situation is unsustainable, but for the moment it is only capable to resorting to an extremely short-sighted VAT rate increase (to a staggering 22%), which will depress consumption even more, and to vague proclaims about the necessity of shifting the tax burden way from wages and companies to financial rents, although the chances of this to be implemented are essentially negligible.

Throughout the summer, Italian political leaders and the mainstream press have hammered the population with messages of an imminent recovery (la ripresa). Indeed, it is not impossible for an economy which has lost about 8% of its GDP to have one or more quarters in positive territory. However, it is a profound distortion of elementary semantics to call a (perhaps) +0.3% annual rebound as “recovery”, considering the economic disaster unfolding in the last five years. More correct would be to talk about a transition from a severe recession to some sort of stagnation. But unfortunately, like characters of a Greek tragedy, Italian leaders were deprived by the gods even of this illusionary and pitiful dream of a stagnation. Economic data of the summer months indicate that the economic downturn is far from being over.

A recent study indicates that 15% of Italy’s manufacturing industry, which before the crisis was the largest in Europe after Germany’s, has been destroyed, and about 32,000 companies have disappeared. This data alone shows the immense amount of essentially irreparable damage which the country is undergoing. In the author’s view, this situation has its roots in the immensely degraded political culture of the country’s elite, which, in the last few decades, has negotiated and signed countless international agreements and treaties without ever considering the real economic interest of the country and without any meaningful planning of the nation’s future. Italy could not have entered the last wave of globalisation under worse conditions. The country’s leadership never recognised that indiscriminate opening to Asia’s light industrial products would destroy Italy’s once leading industries in the same sectors. They signed the euro treaties promising to the European partners reforms which have never been implemented, but fully committing themselves to austerity policies. They signed the Dublin Regulation on EU borders knowing perfectly well that Italy is not even remotely able (as shown by the continuous influx of illegal migrants in Lampedusa and the inevitable deadly incidents) to patrol and protect its borders. Consequently, Italy has found itself locked up in a web of legal structures which are making the complete demise of the nation practically certain.

Italy has currently the highest taxation levels on companies in the EU and one of the highest in the world. This factor, together with a fatal mix of awful financial management, inadequate infrastructure, ubiquitous corruption and an inefficient bureaucracy, which includes the slowest and most unreliable justice system in Europe, is pushing all remaining entrepreneurs out of the country. This time not only towards cheap labour destinations, such as East or South Asia, but a large flux of Italian companies is pouring in neighbouring Switzerland and Austria, where, despite the relatively high labour costs, companies will find a real state cooperating with them, instead of sabotaging them. A recent event organised by the Swiss city of Chiasso (next to the Italian border) to illustrate the investment opportunities in the Tessin Canton was attended by a crowd of 250 Italian entrepreneurs.

The demise of Italy as an industrial nation is also reflected by the unprecedented level of brain drain, with tens of thousands young researchers, scientists, technicians emigrating to Germany, France, Britain, Scandinavia, as well as to North America and East Asia.

In sum, everybody in the country producing anything of value, together with most of the educated people is leaving, planning to leave, or would like to leave. Indeed, Italy has become a place for some sort of demographic pillaging from the perspective of other, more organised countries, which have long seen the opportunity to easily attract highly qualified workers, often trained at the expenses of the Italian state, simply by offering them resonable economic prospects which they will never see if they remain in Italy.

All this seems not to preoccupy the Italian political leadership. On the one hand, the country is the prisoner of a cultural duopoly: it is either the Catholic culture, or the socialist culture. Both are preoccupied with universal ambitions (somehow eschatological and increasingly anti-modernist) which make the national perspective unviable to them. Indeed, the Italian state was created by liberal-conservative and monarchist modernists, sometimes animated by virulent forms of anticlericalism, essentially the opposite of the current political elite. It is not surprising that what the former accomplished gets dismantled by the latter. The problem is not so much, however, the dismantling of the nation state, but that the nation state is not going to be replaced by any meaningful political project, leaving its space, essentially, to chaos.

On the other hand, Italy has entered a period of constitutional anomaly. Because party politicians have brought the country to a near-collapse in 2011, an event which would have had severe consequences globally, the country has been essentially taken over by a small number of technocrats coming from the President of the Republic’s office, the bureaucrats of several key ministries and the Bank of Italy. Their task is to guarantee stability to Italy vis-à-vis the EU and the financial markets at any cost. This has been so far achieved by sidelining both the political parties and the parliament to unprecedented levels, and with a ubiquitous and constitutionally questionable interventionism from the President of the Republic, who has extended his powers well beyond the boundaries of the still officially parliamentary republican order. The President’s interventionism is particularly evident in the creation of the Monti government and in the current Letta government, which are both direct expression of the Quirinale. The point here is that, where politicians have failed, bureaucrats and technocrats hope to succeed. The illusion, which many Italians are cultivating by believing that the President, the Bank of Italy and the bureaucracy know better how to save the country, is now widespread. They will be bitterly disappointed. The current leadership, both technocratic and political, has no ability, and perhaps even no intention, to save the country from ruin. On the contrary, it would be easy to argue that Monti’s policies have exacerbated the already severe recession. Letta is following exactly the same path. But everything has to be sacrificed in the name of stability. The technocrats share the same cultural backgrounds of the political parties, and in symbiosis with them have managed to rise to their current positions: it is therefore hopeless to think that they will obtain better results, since they are also unable to have any sort of long term vision for the country. They are actually the guarantors of Italy’s demise.

In conclusion, the rapidity of the decline is truly breathtaking. This is certainly not exclusive to Italy, as arguably most if not all Western countries are undergoing rampant thirdworldisation. Italy has simply less economic and social “capital” to burn in comparison to Germany and other Nordic countries. But it must be clear that, continuing on this way, there will be nothing left of Italy as a modern industrial nation in less than a generation. But just in another decade or so entire regions of the country, such as Sardinia or Liguria, will be so much demographically compromised that they may never recover. The founders of the Italian state one hundred and fifty-two years ago had fought and even died hoping to bring Italy back to a central position as a cultural and economic powerhouse within the Western world, as the one it occupied in the late Middle Ages and Renaissance. That project has now completely failed, with the abandonment the very cultural idea of having any meaningful political ambition going beyond the sheer day-to-day management on the one hand, and the messianic (but effectively pointless) universalism of saving the world on the other even at the expenses of one’s own political community. Unless some sort of miracle occurs, it may take centuries to reconstruct Italy. At the moment, it seems to be a completely lost cause.”

3 Comments

Angelo Paratico

Donatella

October 12, 2013 - 4:09 pm

Everything true. Orsi is sbsolutely right on every point he makes.
But what next? are we drawning our country and the italians that did not have yet the opportunity to leave it to find a better future? the only possible reply can be “Yes” since , as Orsi correctly writes,there is not much hope left for Italy.
It is not the time to hide our head under the sand, as Ciriaco pointed out, it is time TO MOVE ON and start doing something to change and improve the situation. We can and we have to give our ,even small, contribution to the change of this situation,
I believe that Orsi should reserve his correct considerations for the Italian Politicians. Italian people know only too well how bad the situation is; they certainly do not need more people reminding them the difficult (and, in some cases , pretty miserable ) conditions they are living.
Donatella

Ciriaco Offeddu

October 14, 2013 - 3:20 pm

Thank you. There’s a “denial complex” or a “denial effect” that we have to fight first. We must know which is the real situation. Starting from the 2008, the Italian politicians, parties and newspapers gave us only packs of lies. Now, after five years of steep decline, we are going to face a terrible social turmoil: Orsi is right. And the convergence of bad news is continuos, unstoppable. Yesterday was Alitalia, today there are the incredible fees that RAI will pay to Fazio and Crozza. To the latter (who is this genius?) 450,000 euros for each appearance in TV! So, I think that we have to say “stop” to this craziness – because it is a pathological behavior in the end. I really don’t want to be an accomplice of those bands of godlessness. They are destroying everything, scientifically.
I agree, we have to move on, to collect all the people of good will, and to shout our disgust and indignation. We have to distance ourselves from this politics. There’s no need, I think, to invite the good Italians to work harder and don’t give up: it is in our genes and curse too. Maybe it is time to lift our head up, maybe just to see the melting ice around, and our end.

CIRIACO OFFEDDU
Engineer, CEO of several companies, more than twenty years of experience as a leader of a consulting group specialized in direct management in a broad range of business disciplines and industries, expert in internationalization processes.

Newly Graduated from the City University of Hong Kong with a Master in Creative Writing.